On December 31, 2020, a day when the available interest rate was 9%, Valcent Products Inc. leased equipment with an eight-year life. The contract called for an $8,400 annual lease payment at the end of each of the next five years, with the equipment becoming the property of the lessee at the end of that period.

Required

1. Prepare entries to record

a. the leasing of the equipment,

b. depreciation expense for 2021 assuming straight-line and a zero residual value,

c. the December 31, 2021, lease payment, including the recognition of interest expense on the lease liability on December 31, 2021.

2. An amortization schedule for the lease liability.